All posts tagged succession planning

There is a great potential for things to unravel when new generations take on roles of leadership as stewards of family wealth or as leaders in a family business. Because each generation has their own independent ideas on how to improve or grow what they have been given, conflicts can arise when the existing leadership has not been involved in a coordinated transfer of leadership. The current team of leaders often find that they lead best when they lead independently from others’ input, well intended or not.

For a family that wants to stay connected independence is not the key to success. It presupposes separation and often times, oligarchy, involving one generation or a certain subset but not others. With a legacy family, independence is an element, merely one of many elements, to a bigger purpose: the purpose the family has defined as their reason for being. This purpose is the one they want to build and foster as a group, together. This purpose i involves the entire family. Its strength lies in its ability to envelop the family in fostering independent thinking while also cultivating mutual trust, respect, unity, and harmony in the bigger, common picture which defines their group.

When families have not developed an overarching purpose for themselves, they risk the probability that the varied and independent ideas of each individual will, over time, spark discord among them. This discord can result in overt or covert squabbles. These, over time, can tear at the threads of the unspoken family harmony.

This discord can result in squandering the assets. A business where the next generation is not mentored into leadership can bring business failure. An asset that is passed down without the understanding of how to steward it can result in the spending of the assets.

An associate told me of a gentleman he knew who suddenly died, leaving his commercial properties to his son. His son thought owning property must be easy. His Dad certainly made it look so. Within five years, this son over leveraged the properties. His life changed when he was caught, tried and convicted of running an investment scheme, asking for investment money to develop these now severely over leveraged properties and found this “son” was using their investments to keep the creditors at bay and fund his own lavish lifestyle. He found out what Dad made look easy was not so easy to do after all. He is now serving his jail time. His properties have all been sold to pay creditors, investors and attorneys. What his Dad built was squandered in less than one generation.

When one is not prepared to receive and mentored on how to use an asset that is given, it is too easy to spend it to fund one’s own sense of an entitled lifestyle. After all, “Dad did this for me, right.” comes the weak justification.

Preparing family members to become stewards of the assets they have been given is the best gift one generation can give to another.

Preparing generations for their roles of leadership gives a family a sense of alignment not entitlement. From this alignment comes harmony, direction, and a common and agreed upon purpose. This is family unity in family leadership where wealth is concerned.

Share with me your thoughts from reading this blog.

What have you noticed to be challenges families face as they pass wealth (in all its facets) from one generation to the next?

Is the focus on the things? Is the focus on the meaning of stewardship and how that can be fostered cohesively?

What else are you thinking as it relates to family connection? I’d love to know.